Forex Terminology

Forex Terminology

Ask (Offer) — The price of the offer, the price you buy for.

Bear - Negative view of a particular currency and believes that its price will decrease,
they are said to be 'bearish' about that currency.

Bid (Demand) —The price of the demand, the price you sell for.

Bull - Positive view of a particular currency and believes that its price will increase, they are said to be 'bullish' about that currency.

ECB (The European Central Bank) — The main regulatory body of the European Union financial system.

Fed (The Federal Reserve) — The main regulatory body of the United States of America
financial system, a division of which, the FOMC (Federal Open Market Committee), regulates, among other things, federal interest rates.

Fundamental Analysis — A Forex trading analysis based only on news, economic indicators and global events.

GDP (Gross Domestic Product) — A measure of the national income and output for a given country's economy. It is one of the most important online forex indicators.

Limit - A placed on a trade so as to exit it after a speculator has gained the expected number of pips.

Long - Trading a currency under the assumption that its price will rise - a 'buy' trade..

Loss —The loss from closing long position at lower rate than opening or short position with higher rate than opening, or if the profit from a position closing was lower than broker commission on it.

Lot — Definite amount of units or amount of money accepted for operations handling
(usually it is a multiple of 100).

Momentum — The measure of the currency's ability to move in any given direction.

Moving Average (MA) — one of the most basic technical indicators. It shows the average rate calculated over a series of time periods.

Exponential Moving Average (EMA)

Weighted Moving Average (WMA) etc. are just the ways of weighing the rates and the periods.

Open Position (Trade) — Position on buying (long) or selling (short) for a currency pair.

Order — Order for a broker to buy or sell the currency with a certain rate.

Pip - Price Interest Point and refers to the smallest digit in any pricing, so if GBPUSD rose from 1.9443 to 1.9450, it rose 7 pips.

Pivot Point — The primary support/resistance point calculated basing on the previous trend's High, Low and Close prices.

Principal Value — The initial amount of money invested.

Profit (Gain) — Positive amount of money gained for closing the position.